Character Group lowers guidance as it points to impact of Toys R Us bankruptcy

 
Alys Key
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Toys R Us filed for bankruptcy last month (Source: Getty)

Shares in a leading British toymaker dropped over 16 per cent in early trading this morning after it said it had already seen a negative effect from the bankruptcy of Toys 'R' Us.

Character Group, the company which makes Peppa Pig and Teletubbies toys in the UK and recently won a Pokemon licence, said in a trading update that the Toys 'R' Us situation had "had subsequent knock-on repercussions in every market where it trades (including the UK)."

Toys 'R' Us, one of the world's biggest toy retailers, last month filed for Chapter 11 protection for its North America operations.

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While this did not affect the company's UK arm, YouGov data shows that the British public's perception of the brand has plummeted since it hit the headlines for its bankruptcy.

Character Group added that its international sales have also been affected due to consumers' "conservative approach to purchases".

The company revised guidance for the year ending August 2018 down, saying that results would be "significantly lower than market expectations".

However the directors insisted this would be a "temporary downturn" and that a wider range of products the following year will lead to improved performance.

Read more: Lego to cut 1,400 jobs by the end of the year

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